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Revenue insurance purchase decisions of farmers

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  • Ashok Mishra
  • Barry Goodwin

Abstract

The objective of this study is to evaluate farm, household, and financial characteristics of cash grain farmers' decisions of whether to purchase revenue insurance. Using farm-level data these characteristics were identified by estimating a logit model of revenue insurance purchase decisions by farm operators. Results indicate that farm operators with the ability to self-insure through accumulation of sufficient wealth reserves measured in terms of the ratio of debts-to-assets, operators with off-farm income, and participation in production and marketing contracts, are more likely to pursue these strategies as a substitute for federal revenue insurance programmes. Further, study finds that older and wealthy cash grain farmers are less likely to buy revenue insurance.

Suggested Citation

  • Ashok Mishra & Barry Goodwin, 2006. "Revenue insurance purchase decisions of farmers," Applied Economics, Taylor & Francis Journals, vol. 38(2), pages 149-159.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:2:p:149-159
    DOI: 10.1080/00036840500367724
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    3. Falola, Abraham & Ayinde, Opeyemi Eyitayo & Agboola, Babatola Olasunkanmi, 2013. "Willingness To Take Agricultural Insurance By Cocoa Farmers In Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 1(1), pages 1-12, July.
    4. Željko Kokot & Todor Marković & Sanjin Ivanović & Maja Meseldžija, 2020. "Whole-Farm Revenue Protection as a Factor of Economic Stability in Crop Production," Sustainability, MDPI, vol. 12(16), pages 1-11, August.
    5. Abel Tiemtore, 2021. "Examining the effects of agricultural income insurance on farmers in Burkina Faso," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 422-439, July.
    6. Fahad, Shah & Wang, Jing & Hu, Guangyin & Wang, Hui & Yang, Xiaoying & Shah, Ashfaq Ahmad & Huong, Nguyen Thi Lan & Bilal, Arshad, 2018. "Empirical analysis of factors influencing farmers crop insurance decisions in Pakistan: Evidence from Khyber Pakhtunkhwa province," Land Use Policy, Elsevier, vol. 75(C), pages 459-467.
    7. Chang, Hung-Hao & Mishra, Ashok K. & Livingston, Michael, 2011. "Agricultural policy and its impact on fuel usage: Empirical evidence from farm household analysis," Applied Energy, Elsevier, vol. 88(1), pages 348-353, January.
    8. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    9. Peng Peng & Zhigang Xu, 2022. "Price expectations, risk aversion, and choice of sales methods for large‐scale farmers under incomplete market conditions," Agribusiness, John Wiley & Sons, Ltd., vol. 38(4), pages 1012-1031, October.
    10. Ming Wang & Tao Ye & Peijun Shi, 2016. "Factors Affecting Farmers’ Crop Insurance Participation in China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(3), pages 479-492, September.
    11. Tao Ye & Yangbin Liu & Jiwei Wang & Ming Wang & Peijun Shi, 2017. "Farmers’ crop insurance perception and participation decisions: empirical evidence from Hunan, China," Journal of Risk Research, Taylor & Francis Journals, vol. 20(5), pages 664-677, May.
    12. Saul Ngarava & Abbyssinia Mushunje & Amon Taruvinga & Peter Mukarumbwa & Simbarashe Tatsvarei & Ebenezer T Megbowon, 2018. "Determinants of Risk Behaviour in Livestock Development Programs: Evidence from South Africa's Kaonafatso Yadikgomo (Kyd) Scheme," Journal of Economics and Behavioral Studies, AMH International, vol. 10(5), pages 7-15.
    13. Awais Jabbar & Qun Wu & Jianchao Peng & Ali Sher & Asma Imran & Kunpeng Wang, 2020. "Mitigating Catastrophic Risks and Food Security Threats: Effects of Land Ownership in Southern Punjab, Pakistan," IJERPH, MDPI, vol. 17(24), pages 1-18, December.
    14. Burns, Christopher & Prager, Daniel, "undated". "Do Direct Payments and Crop Insurance Influence Commercial Farm Survival and Decisions to Expand?," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235693, Agricultural and Applied Economics Association.
    15. Hashmiu, Ishmael & Agbenyega, Olivia & Dawoe, Evans, 2022. "Determinants of crop choice decisions under risk: A case study on the revival of cocoa farming in the Forest-Savannah transition zone of Ghana," Land Use Policy, Elsevier, vol. 114(C).
    16. Burns, Christopher B. & Prager, Daniel L., 2018. "Does Crop Insurance Influence Commercial Crop Farm Decisions to Expand? An Analysis Using Panel Data from the Census of Agriculture," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(1), January.
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